Robinhood’s cryptocurrency division might quickly be in bother with the Securities and Alternate Fee. In an 8-Okay submitting submitted on Saturday, Robinhood revealed that it acquired a Wells discover from the SEC’s employees recommending the company take motion in opposition to the buying and selling platform for alleged securities violations.
Robinhood says it acquired the Wells discover after cooperating with the SEC’s requests for investigative subpoenas about its crypto listings, custody of cryptocurrencies, and the platform’s operations. A Nicely discover is a letter from the SEC that warns an organization of a possible enforcement motion. The SEC’s response might embody an injunction, a cease-and-desist order, disgorgement, limits on actions, and / or civil penalties.
“We firmly consider that the belongings listed on our platform will not be securities and we look ahead to participating with the SEC to clarify simply how weak any case in opposition to Robinhood Crypto can be on each the details and the legislation,” Dan Gallagher, Robinhood’s chief authorized, compliance, and company affairs officer, mentioned in a press release.
Robinhood says it already made the “troublesome selection” to delist sure tokens — together with Solana, Polygon, and Cardano — in response to the SEC’s lawsuits in opposition to different buying and selling platforms. Prior to now, the SEC has argued that some cryptocurrencies are thought-about securities, which might require exchanges to register with the SEC. This may give the company regulatory management over the exchanges and the registered tokens.
Robinhood might face an extended authorized battle if it chooses to battle the SEC’s potential enforcement motion. The corporate’s shares have already dipped in response to the information.